{"id":10932,"date":"2020-01-01T14:54:23","date_gmt":"2020-01-01T06:54:23","guid":{"rendered":"https:\/\/alumni.nus.edu.sg\/thealumnus\/?p=10932"},"modified":"2026-04-20T15:49:01","modified_gmt":"2026-04-20T07:49:01","slug":"when-tradewinds-get-rough","status":"publish","type":"post","link":"https:\/\/alumni.nus.edu.sg\/thealumnus\/2020\/01\/01\/when-tradewinds-get-rough\/","title":{"rendered":"When Tradewinds Get\u00a0Rough"},"content":{"rendered":"\t\t
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Professor Andrew K Rose has served as Dean and distinguished professor of the NUS Business School since 1 June 2019. Prof Rose has published over 150 papers including, over 90 articles in refereed economics journals. His research addresses issues in international trade, finance and macroeconomics, and has received more than 45,000 citations.<\/span><\/h5>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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THE TRUMP PRESIDENCY HAS INVOKED A STRONG RESPONSE FROM VARIOUS QUARTERS FROM ACROSS THE WORLD \u2014 FOR A MULTITUDE OF REASONS. FROM YOUR PERSPECTIVE, WHAT AREAS SHOULD BE CONCERNED ABOUT WITH REGARD TO HIS ECONOMIC POLICIES?<\/strong><\/span><\/h5>
Singaporeans should be most concerned about Trump\u2019s trade policy, and we should all thank the heavens that he doesn\u2019t meddle with much more than that! I\u2019m an international economist, someone who believes strongly that the international exchange of goods, services, capital, people and ideas almost always benefits all concerned. I think my initial fears about Trump \u2014 the catalyst for my move to Asia \u2014 were justified. Ignoring the other ills he has perpetrated, Trump has single-handedly undermined the international rules-based system of international commerce, and unleashed a trade war. Indeed, my recent research shows that countries that raise tariffs suffer reduced growth and productivity within a few years, along with increased unemployment and inequality. That should not be much of a surprise, since tariffs are just taxes on imports, which are things that foreigners produce more cheaply than we can do domestically. And that\u2019s ignoring the effects on other countries, along with their retaliation!<\/div>
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BUT IF TARIFFS RAISE THE PRICE OF FOREIGN IMPORTS, DON\u2019T PEOPLE TEND TO BUY MORE DOMESTIC GOODS INSTEAD, RAISING EMPLOYMENT, THE TRADE BALANCE AND OUTPUT?<\/span><\/strong><\/h5>
Well, tariffs do indeed raise the price of imports. Research has shown that\u2019s the chief reason that most Americans have lost from Trump\u2019s tariffs; they pay more for Chinese goods, which are particularly used by those with lower incomes. But tariffs also tend to lead to an appreciation of the foreign exchange rate, which harms export competitiveness, and offsets any effect on the trade balance. That\u2019s exactly what I find in my research, and it\u2019s consistent with common sense. In the past few years the US Dollar has risen considerably, while the American balance of trade has actually worsened since Trump was elected from around US$45 billion a month to around US$55 billion now.<\/div>
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SO WHY DO COUNTRIES LAUNCH TARIFF WARS IF THEY TEND TO LOSE FROM THEM?<\/span><\/strong><\/h5>
It\u2019s important to remember that countries usually don\u2019t launch trade wars! This is really the result of one man \u2212 who unfortunately happens to be President of the United States! It\u2019s hard to see why Trump started his tariff war, and even more difficult to figure out how it\u00a0will end; he hasn\u2019t said what victory would consist of,\u00a0or what his objectives are. But it\u2019s unsurprising (at least to an economist like me) that the United States\u00a0is losing from protectionism; that point was\u00a0made by Adam Smith almost 250 years ago in\u00a0The Wealth of Nations<\/em>.\u00a0<\/div>
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PRESIDENT TRUMP HAS SAID THAT IT\u2019S REALLY ABOUT BRINGING INDUSTRIES BACK TO AMERICAN SOIL, THUS CREATING JOBS, AND RELYING LESS ON FOREIGN IMPORTS, ETC. AND ULTIMATELY TO REVIVE THE US ECONOMY AND ALLOW IT TO NEGOTIATE FROM A STRONGER POSITION. WHAT IS THE KEY FLAW OF SUCH THINKING, GIVEN THE REALITIES OF TODAY\u2019S GLOBAL ECONOMY?<\/strong><\/span><\/h5>
It\u2019s ludicrous to think about returning industry to America when the American unemployment rate is the lowest it has been in 50 years! America doesn\u2019t need more jobs; it needs more productivity growth, and the one good way to spur innovation is through competition \u2014 including foreign competition. Imagine how poor Singapore would be if it closed itself off from international influences! America should become more like Singapore in my opinion, and less like the countries led by Trump\u2019s current friends which include North Korea and Russia.<\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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America doesn\u2019t need more jobs; it needs more productivity growth, and the one good way to spur innovation is through competition \u2014 including foreign competition.<\/span><\/h5>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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WHAT ABOUT CHINA, THE TARGET OF PRESIDENT TRUMP\u2019S TRADE WAR?<\/span><\/strong><\/h5>

Of course, other countries also lose from the American trade war, including American rivals like China, and, unfortunately, allies like Singapore. Indeed, one of the key aims of American foreign policy over the 70 years after World War II was to create an international trade system that liberalised trade between the United States and its allies, binding them together in a network that reinforced security and commercial ties. Singapore is a perfect example of a country that has benefited enormously from the system that is now under threat. As international trade shrinks, ports like Singapore lose.<\/p>

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THIS BEING SAID, ARE ANY OF PRESIDENT TRUMP\u2019S ALLEGATIONS ABOUT CHINA\u2019S ECONOMIC\/TRADE POLICIES POSSIBLY \u2018JUSTIFIABLE\u2019? I.E. DO CHINA AND\/OR OTHER COUNTRIES SHARE THE BLAME FOR THIS TRADE WAR? OR IS THIS A PURELY AN AMERICAN DOING?<\/span><\/strong><\/h5>

America has been long concerned with bad behaviour on the part of the Chinese government, most especially the forced transfers of technology from foreign companies which are often the price of doing business in China. Indeed, there was a strategy to handle this: America formed a coalition of like-minded countries that are important to China, and negotiated a treaty to try to force China to shape up. But Trump dropped out of that \u2014 the Trans-Pacific Partnership \u2014 as literally his first action as president, simply because it had been negotiated by Barack Obama. Indeed, many of Trump\u2019s actions are intended merely to reverse Obama\u2019s policies. That\u2019s not a sensible way to be president!\u00a0<\/p>

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AN ECONOMIST ABROAD: THE PUSH AND PULL OF A NEW DEAN<\/span><\/em><\/strong><\/h5>
In this exclusive online interview for The\u00a0Alum<\/em>NUS, Professor Andrew Rose, who took over from Professor Bernard Yeung as Dean of the Business School in June 2019, talks about his new role and what drew him to the University.<\/strong><\/span><\/div>

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You recently arrived in Singapore after more than three decades at UC Berkeley, one of the leading public universities in the world. What prompted the move?<\/span>
<\/span>There were two kinds of forces: the push away from the United States, and the pull of NUS-Business and Singapore. The catalyst was the election of Donald Trump; I actually sent an email to my closest friend at NUS on election night saying that my family and I were ready to leave the United States.<\/strong><\/p>

What attracted you to Singapore?<\/strong><\/span>
As America turned more nativist and populist, I realised the most appropriate response was to go to a place that welcomes diversity and science. Singapore is nothing if not pragmatic, and the technocratic bureaucracy here appreciates evidence-based logic. The diversity and meritocracy of Singapore are features that I have always found admirable, which explains why I\u2019ve been visiting Singapore regularly for decades. America may be pushing people like me away, but Singapore also exerts a mighty pull! Also, NUS has the advantage of an exceptionally clear-minded leadership team, which I appreciate.<\/strong><\/p>

Where do you think NUS is going?<\/strong><\/span>
Succinctly, I think of NUS as being committed to the production and dissemination of research \u2014 which is, in my view, the proper role for any serious university.<\/strong><\/p>

But what about teaching? Many have claimed that instruction is the appropriate goal for a public institution like NUS.<\/span>
<\/span>Well they\u2019re not mutually exclusive since research is, in part, disseminated in the classroom. And you never want to forget that humanity only progresses through basic research which spurs innovation. Indeed, that\u2019s the reason governments like that of Singapore fund universities \u2014 the spillovers are enormous.<\/strong><\/p>

The key reason I care about research in my role as dean is that it\u2019s critical to our students, past, present and future. The reason is simple: universities are not judged primarily by the value of their teaching. They can\u2019t be; teaching methods and quality just don\u2019t vary that much across universities. Where universities differ is in their ability to produce innovative research. Professors at leading universities such as MIT and Oxford aren\u2019t better at delivering lectures; but they\u2019re better at producing the content that goes into the lectures. And as the calibre of NUS research rises, the faculty will attract better students who will create better alumni networks, and the virtuous circle continues. The irony is that it\u2019s very much in the interests of NUS students to have faculty who spend most of their time doing research, and not teaching!<\/strong><\/p>

What\u2019s the most exciting new development at NUS Business School?<\/strong><\/span>
Well, we have a lot of initiatives going on, but let me highlight one: our growth, particularly in the number of masters-level courses we can offer. We\u2019ve seen tremendous growth in the demand for pre-experience MSc courses, along with continuing growth for our MBA and Executive MBA programmes. At this point, we unfortunately can\u2019t satisfy much of it, because of constraints. We\u2019re working very hard to expand our capacity to deliver high-quality instruction to our students, in two dimensions: space and people. We\u2019re building a new Executive Centre next to the NUS Guild House which will have over 180 rooms suitable for short-term stays by our EMBA and executive education students, among others. We\u2019re also renovating the Hon Sui Sen Memorial Library to provide a number of quality classrooms in order to deliver the classes we need, as well as the small breakout and group-study rooms that students demand at a top-quality business school. Simultaneously, we\u2019re pushing hard to hire another dozen faculty members so that we\u2019ll have the human capacity. It\u2019s an exciting \u2014 and exhausting \u2014 process.<\/strong><\/p>

You have a lot of important work ahead of you; good luck to you and Biz School!<\/strong><\/span>
Thank you!<\/strong><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

The new Dean of NUS Business School Professor Andrew K Rose takes a look at the thinking behind policies that has drawn the world to the brink of a global trade war.<\/p>\n","protected":false},"author":12,"featured_media":10933,"comment_status":"closed","ping_status":"open","sticky":false,"template":"elementor_theme","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4,19],"tags":[],"class_list":["post-10932","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-leadership","category-perspectives"],"acf":[],"_links":{"self":[{"href":"https:\/\/alumni.nus.edu.sg\/thealumnus\/wp-json\/wp\/v2\/posts\/10932","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alumni.nus.edu.sg\/thealumnus\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alumni.nus.edu.sg\/thealumnus\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alumni.nus.edu.sg\/thealumnus\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/alumni.nus.edu.sg\/thealumnus\/wp-json\/wp\/v2\/comments?post=10932"}],"version-history":[{"count":96,"href":"https:\/\/alumni.nus.edu.sg\/thealumnus\/wp-json\/wp\/v2\/posts\/10932\/revisions"}],"predecessor-version":[{"id":11045,"href":"https:\/\/alumni.nus.edu.sg\/thealumnus\/wp-json\/wp\/v2\/posts\/10932\/revisions\/11045"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/alumni.nus.edu.sg\/thealumnus\/wp-json\/wp\/v2\/media\/10933"}],"wp:attachment":[{"href":"https:\/\/alumni.nus.edu.sg\/thealumnus\/wp-json\/wp\/v2\/media?parent=10932"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alumni.nus.edu.sg\/thealumnus\/wp-json\/wp\/v2\/categories?post=10932"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alumni.nus.edu.sg\/thealumnus\/wp-json\/wp\/v2\/tags?post=10932"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}